A NEW report has called for closing the ethnicity pay gap which could lead to a rise in wages for black, Bangladeshi and Pakistani women in the UK.
Black, Bangladeshi and Pakistani women earned 15 to 16 per cent less than white British workers, the McKinsey Institute for Black Economic Mobility found.
In contrast, Indian and Chinese workers earned 16 and 23 per cent more, respectively, than white workers.
“Organizations with robust ethnic-minority representation in leadership teams are 33 to 36 per cent more likely to outperform their peers on profitability. Further, closing the pay gap could translate to a 30 per cent increase in the average black, Bangladeshi, and Pakistani woman’s annual salary,” the report, titled Race in the UK workplace: The intersectional experience, said.
It showed the pay gap has closed for black, Bangladeshi and Pakistani women aged 16 to 25. They earn on par with white male workers in the same demographic and black women earn 11 per cent more, it said.
The largest increase for black, Bangladeshi and Pakistani women in labour participation occurred among health professionals – such as doctors, nurses, and midwives – where the representation rose five percentage points to seven per cent over the past decade. Young black, Bangladeshi and Pakistani workers also have greater access to social capital compared to women aged 26 and older and this support helps them better navigate the labour market, the report found.
Responding to the report, Lord Karan Bilimoria said, “The McKinsey report lays out well the pitfalls of a one size fits all approach to race equity. Businesses must first understand the ethnic minority representation in their workplace at a granular level. Only then can we really understand the scale of inequity and which groups are least represented at a more senior level.
“With this powerful data we can then put in place targeted measures to support specific groups and I recognise the unique challenges faced by ethnic minority women - from my work founding Change the Race Ratio, we found the same challenge. We have 115 signatories, including some of the largest business in the UK; each one has made a commitment to collect and report data and put in place targets and action plans to address representation gaps.”
Lord Karan Bilimoria
According to the McKinsey report, the pay gap starts to grow significantly for Bangladeshi and Pakistani women aged 26 to 35, a trend that continues for black, Bangladeshi and Pakistani women aged 36 to 55, who face the widest pay gaps of all groups.
Bangladeshi and Pakistani women aged 26 to35 years earn 27 per cent less per hour when compared to white men and black women of this age range fare even worse, earning 36 per cent less per hour, the report said. Among health professionals, black women earn 23 per cent less per hour than white men and Bangladeshi and Pakistani women earn 14 per cent less, it added.
“This report highlights the unacceptable challenges that Bangladeshi and Pakistani women, alongside their black colleagues, continue to experience in getting fair access to progression at work,” said Dr Shabna Begum, co-CEO, Runnymede Trust. “Even the improvements in early career entry are only won after having to submit significantly more applications and facing more rejection – often being told that they do not have a “cultural or values fit’ with the organisation.”
She said women have to navigate a “complex and interactive system of often soft discrimination practices at work” and there is a need to engage actively with antiracist work to offer fair and productive workplaces to all their employees.
An internal diversity audit by the Bank of England in 2021 found that ethnic minorities, including black, Bangladeshi and Pakistani women with the same performance rating as white women were 25 per cent more likely to quit their job than their white colleagues due to lack of career progression and poorer experiences.
Among those aged 56 to 65 years, black women are over-represented compared with white women, who are more likely to have the financial means to retire earlier, the report said.
“Over the past decade, more white, Bangladeshi and Pakistani women of this age group chose to leave employment for family care (31 and 27 per cent, respectively), while more black women had to stay in their jobs longer (an additional nine per cent),” the report said. “Meanwhile, participation for Bangladeshi and Pakistani women remains consistently below that of their black and white female colleagues, dropping to around 23 per cent in the 56-to-65 age group.”
The survey also showed the youngest generations were more likely to have the network available to them to get a job (19 per cent women aged 16 to 25) than other generations (14 per cent for ages 26 to 55 and five per cent for ages 56 to 65).
It also found out that 60 per cent of white candidates (both male and female) get hired after applying to ten jobs versus only 45 per cent of black, Bangladeshi, and Pakistani female workers. As Bangladeshi and Pakistani women retire, the survey showed their participation drops to about 20 per cent and their pay gap grows to a 32 per cent disparity, the highest of all age groups.
“In contrast, 59 per cent of black women remain in the workforce at this age, and their pay gap falls to just seven per cent compared with white men.”
“This pattern could indicate that the Bangladeshi, Pakistani and white groups who can afford to retire or have the necessary support network exit the labour market. While the pay gap between black women and white men lessens, this is not because black women are earning more, but rather because the median pay of white men aged 56 to 65 drops 21 per cent from the highest median pay.”
To address these issues, the report’s authors said measures must be prioritised to meet the unique needs of black, Bangladeshi and Pakistani women.
